Import of Vehicles (Pakistan)

Vehicles Taxpayer’s Facilitation Guide Brochure- ___ December 2010

Revenue Division [email protected] Federal Board of Revenue 0800-00-227, 051-111-227-227 Government of Pakistan www.fbr.gov.pk

Brochure – Import of Vehicle

Our Vision

To be a modern, progressive, effective, autonomous and credible organization for optimizing revenue by providing quality service and promoting compliance with tax and related laws

Our Mission Enhance the capability of the tax system to collect due taxes through application of modern techniques, providing taxpayer assistance and by creating a motivated, satisfied, dedicated and professional workforce Our Values Integrity Professionalism Teamwork Courtesy Fairness Transparency

Responsiveness For assistance and information on tax matters Please contact our help line center

through Toll Free Telephone 0800-00-227 Telephone 051-111-227-227 or 051-111-227-228

Fax 051-9205593 E-mail [email protected] or

Visit our tax facilitation center (located in all major cities) or any tax office or Visit our website at www.fbr.gov.pk

Brochure – Import of Vehicle

Revenue Division Brochure - ____ Federal Board of Revenue Government of Pakistan February 2008

Introduction

This brochure provides basic information for the benefit and use of taxpayers importing vehicle to understand their rights and obligations. The brochure explains in detail the conditions laid down in the Import Trade Policy and the structure of taxes under the Customs Act, 1969, Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Capital Value Tax on import of vehicles.

In this brochure some terms that are not familiar to taxpayers used for the first time are in italic bold and explained appropriately.

This brochure is to assist the taxpayers and reflects the legal position at the time of printing. In case of any conflict the legal provisions of the law shall always prevail over the contents of this brochure.

Comments and suggestions We welcome your comments about this brochure and your suggestions for future editions. You can e-mail us at [email protected]

You can write to us at the following address: Facilitation and Tax Education, Federal Board of Revenue, Constitution Avenue, Islamabad

Brochure – Import of Vehicle IMPORT OF VEHICLES

1. The Trade Policy and Customs rules following three schemes (certain allow import of vehicles into Pakistan. restrictions and conditions apply): Both new and used vehicles can be imported. Transfer of residence

2. New vehicles can be imported freely by Gift any one, under the generally applicable import procedures and requirements, Personal baggage like any other goods, on payment of applicable duty and taxes. 4. The terms and conditions applicable for the import of vehicles under the above 3. Used vehicles can only be imported by mentioned three schemes are tabled Pakistani Nationals under any of the below:

Table – I S. Requirements Applicable terms and conditions No . Transfer of Residence Gift Scheme Personal Baggage Scheme Scheme a. Eligibility to Once in two years (700 days after the date of Bill of Entry / Goods import Declaration of an earlier import under any of the three schemes) b. Type of vehicle Cars meant for Cars meant for Cars meant for transport that can be transport of transport of of passengers excluding imported passengers passengers, busses, vans, trucks & excluding busses, excluding busses, pickups, 4X~4 vehicles vans, trucks & vans, trucks & Agricultural tractors, pickups, 4X4 pickups, 4X4 bulldozers, laser land vehicles vehicles levelers and combined Agricultural tractors, Agricultural tractors, harvesters bulldozers, laser land bulldozers, laser levelers and land levelers and combined harvesters combined harvesters Motor cycles and scooters Not more than c. Model of the Not more than Three Three Not more than Three vehicle years old model years old model years old model (year of (year of (year of manufacturer) manufacturer) manufacturer) d. Importer‟ s A minimum of 700 A minimum of 700 A minimum of 180 days Period of stay days stay out-side days stay out-side stay out-side Pakistan out-side Pakistan during the Pakistan during the during the immediately Pakistan immediately immediately preceding seven months preceding three preceding three from the date of years from the date years from the date application

Brochure – Import of Vehicle of application of application

e. Donee Not applicable A family member Not applicable

(To whom the normally resident in

vehicle can be Pakistan i.e.:

gifted)

i. By parents to children

(adult)

ii. By children (adult) to

parents

iii. By either of the

spouse

iv. By sister to sister or

brother

v. By brother to brother

or sister

Brochure – Import of Vehicle

f. Procedure and i. Goods declaration i. Goods declaration in i. Goods declaration Documents etc. in the prescribed the prescribed form as in the prescribed form as per per Annexure I form as per Annexure I Annexure I ii. Purchase receipt of ii. Purchase receipt the vehicle ii. Purchase receipt of the vehicle of the vehicle iii. Bill of lading showing iii. Bill of lading, if name and address of iii. Bill of lading, if applicable, dated not the consignee applicable, dated later than 120 days not later than 120 from the arrival of the iv. Attested photo copy days from the arrival applicant of the passport of of the applicant Pakistan origin card of iv. Attested photo the donor iv. Attested photo copy of the passport copy of the passport or Pakistan origin v. CNIC of the donee or Pakistan origin card (Original will be card (Original will be required at the time required at the time of clearance) of clearance)

Regular import of new vehicles

5. Two different regimes are en-force for levy of SPECIAL REGIME the taxes payable on import of vehicles, 6. Under the “Special Regime” the taxes are under the above schemes. In this facilitation levied on the basis of engine capacity, material, these are referred as Special Regime and Normal Regime. irrespective of the value of the vehicle and the optional or additional accessories. The Special Regime covers: accumulated amount of taxes, covering Custom Duty, Sales Tax, Income Tax and Certain specified used vehicles Capital Value Tax based on engine capacity, imported under the aforesaid three on import of the used vehicles meant for schemes. transport of passengers, are tabled below:

Normal Regime covers: TABLE – II Type of vehicle (Used vehicles Taxes New vehicles imported under the aforesaid three schemes; meant for transport of passengers) Used vehicles imported under the Upto 800 CC (Asian makes US$ 4,400 aforesaid three schemes but are not only) covered under the special regime; and

Brochure – Import of Vehicle

Upto 800 CC (Other than US$ 6,600 of 1% for each completed month subject to a Asian makes) maximum of 50%. From 801 CC to 1000 CC US$ 5,500 From 1001 CC to 1300 CC US$ 11,000 Each completed month for depreciation is From 1301 CC to 1500 CC US$ 15,400 calculated from the date of first From 1501 CC to 1600 CC US$ 18,700 registration of the vehicle abroad to the From 1601 CC to 1800 CC US$ 23,100 date of entry into Pakistan. excluding jeeps (Asian makes 8. The amount of taxes stated in Table – II above, only) are payable in US Dollars or equivalent amount in Pak Rupees converted at the rates prevailing at the time of making the payment For enquiries about applicable duties and of the taxes. taxes on vehicles other than those meant for transport of passengers, please contact FBR‟ s Help Line Center. 9. The following example would explain how the amount of taxes payable are determined 7. The amount of taxes stated in Table – II, under the above mentioned Special Regime: above, are reduced on account of depreciation in value of the vehicle at the rate

Particulars Example-I Example- Example-III

Transfer of II Personal baggage

Residence Gift

scheme NORMAL REGIME

Engine 800 CC 1299 CC 1700 CC capacity (Asian (Any (Asian Make)

10. Under the “Normal Regime” the taxes Make) Make)

Date of st st st are levied on the basis of both engine

1 Jan, 1 July, 1 May, 2007 registration

2005 2006 capacity and value of the vehicle. abroad

th th th

Date of entry

20 July, 20 July, 20 July, 2007 11. Normal regime covers the import of into Pakistan

2007 2007

following categories of vehicles: Period 30 Months 12 02 Months and 20 days between first and 20 Months

registration days and 20 New vehicles imported under the and entry days

aforesaid three schemes; into Pakistan

Completed 30 Months 12 02 Months months Months Used vehicles imported under the

Depreciation 30% 12% 2% aforesaid three schemes but are not @ 1% per

covered under the special regime; and month

Admissible 30% 12% 2% Regular import of new vehicles. depreciation

(restricted to

50%)

12. The rates of taxes under the normal

Full amount US $ 4,400 US $ US $ 23,100 regime on import of vehicles meant for of taxes 11,000

transportation of passengers are tabled Reduction in US $ 1,320 US $ US $

taxes to the (30% of 1,320 462 below: extent of the US $ (12% of (2% of US $ 23,100)

TABLE – III amount of 4,400) US $

Type of Customs Sales Income Special depreciation 11,000)

vehicle Duty on Tax on Tax on Federal Actual US $ 3,080 US $ US $ 22,638 (meant for Value Duty Sales Excise Duty amount of 9,680

transport of Assessed paid Tax paid on duty taxes

passengers) (See value value paid value payable Para 13

below) From 1601 75.00% 17.00 5.00% 1.00% CC to 1800 % Used vehicles (Not covered under special regime) CC (Other

than Asian

makes)

Brochure – Import of Vehicle

From 1601 75.00% 17.00 5.00% 1.00% c. In addition, the followings incidental CC to 1800 % CC (Jeeps) charges and costs are added:

From 1801 100.00% 17.00 5.00% 1.00% i. Value of optional / additional CC and R.D. % accessories; above 50.00%

New Cars (Regular import or under aforesaid three schemes) ii. Local agent‟ s commission;

Upto 800 CC 50.00% 17.00 5.00% 1.00% % iii. Ocean/air freight calculated from the

From 801 CC 55.00% 17.00 5.00% 1.00% country where originally to 1000 CC % manufactured;

From 1001 60.00% 17.00 5.00% 1.00% iv. Insurance in the country where CC to 1300 % manufactured or where first registered CC (in case of non-availability of From 1301 60.00% 17.00 5.00% 1.00% CC to 1500 % insurance memo an amount CC equivalent to 1% of C&F value); From 1501 75.00% 17.00 5.00% 1.00% CC to 1600 % v. Landing charges at the rate of 1% of the CC CIF value;

From 1601 75.00% 17.00 5.00% 1.00% CC to 1800 % vi. Other incidental charges; CC

From 1801 100.00% 17.00 5.00% 1.00% 14. In case of used vehicles, the value CC and R.D. % determined as above, is reduced on account above 50.00% of depreciation of the vehicle at the rate of 1% for each completed month subject to a 13. The value of a vehicle for the purposes of maximum of 50%. levy of above taxes is determined as under:

a. Export model - FOB value at the time of its Each completed month for depreciation is manufacture, as certified by the calculated from the date of first registration manufacturer or its authorized local agent. abroad of the vehicle to the date of entry into Pakistan. b. Domestic model - FOB value for similar 15. The following examples based on notional export model certified by the manufacturer values, would explain how the value of a or its authorized agent, plus 5% of the vehicle is determined for the purpose of levy C&F value. of taxes, under the above-mentioned Normal Regime. Particulars Example-I Example-II Example-III Example-IV Transfer of Gift Scheme Gift Scheme Personal Residence OR Baggage Regular Import Engine capacity and make 1800 CC 1600 CC 1800 CC 2200 CC European Any make, Any make, Any make, make, New Car. Used car Used Car. Used car FOB value as certified by the manufacturer at US $ 1,000 US $ 1,000 US $ 1,000 US $ 1,000 the time of its manufacturer Optional / additional accessories US $ 100 US $ 100 US $ 100 US $ 100

Local agent‟ s commission US $ 100 US $ 100 US $ 100 US $ 100

Freight from country originally manufactured US $ 100 US $ 100 US $ 100 US $ 100 e.g. (Osaka, Japan to Karachi- Pakistan)

Brochure – Import of Vehicle Sub- total(C & F value) US $ 1,300 US $ 1,300 US $ 1,300 US $ 1,300

Insurance @ 1% of C & F value US $ 13 US $ 13 US $ 13 US $ 13

Sub- total (CI F value) US $ 1,313 US $ 1,313 US $ 1,313 US $ 1,313

Landing charges @1% of CI F value US $ 13 US $ 13 US $ 13 US $ 13

Other incidental charges, if any US $ 74 US $ 74 US $ 74 US $ 74

Value assessed US $ 1,400 US $ 1,400 US $ 1,400 US $ 1,400

Date of first Registration abroad st NA st th

1 Feb, 2005 1 Feb, 2006 20 April, 2007

th th th

Date of Entry in to Pakistan NA

20 July, 20 July, 20 July, 2007 2007 2007

Period between first registration and entry into 29 Months NA 17 Months 3 months Pakistan & 20 days & 20 days

Completed months 29 Months NA 17 Months 3 months

Depreciation @ 1% per month 29 % NA 17 % 3%

Admissible depreciation (Restricted to 50%) 29% Nil 17% 3%

Reduction in value to the extent of admissible US $ 406 Nil US $ 238 US $ 42 depreciation (29% of US $ (17% of US $ (3% of US $

1,400) 1,400) 1,400)

Depreciated value in US $ for the purpose of US $ 994 US $ 1,400 US $ 1,162 US $ 1,358 levy of duty

Prevailing exchange rate US $ 1 =Rs. US $ 1 =Rs. 85 US $ 1 =Rs. US $ 1 =Rs.

85 85 85

Depreciated value in Pak Rupees for the Rs. 84,490 Rs. 119,000 Rs. 98,770 Rs. 115,430 purpose of levy of duly

16. Once the value is determined the amount of taxes payable are calculated as under:

Value determined of 1600 CC new vehicle Under gift scheme (Example II) Rs. 119,000

Custom Duty - applicable rate 75% (75% of Value determined Rs. 119,000 Rs. 89,250

Sales Tax - applicable rate 17% (17% of Value determined Rs. 119,000 plus Custom Duty Rs. 89,250 Total Rs. 2,08,250 Rs. 35,402

Income Tax - applicable rate 05%

Brochure – Import of Vehicle (05% of Value determined Rs. 119,000 plus Custom Duty Rs. 89,250 plus Sales Tax Rs. 35,402 Total Rs. 243,652 Rs. 12,183

Special Federal Excise Duty - applicable rate 1.00% (1.00% of Value determined Rs. 119,000 plus Custom Duty Rs. 89,250 Total Rs. 208,250 Rs. 2,083 Total Taxes Rs. 138,918

Each tax rupee that you pay helps Pakistan improve its standing, economically and socially, in the nations of the world.

If you are not satisfied – Tell us.

If you are satisfied – Tell others

GOOD DECLARATION. GD-1 ORIGINAL COPY CUSTOMS FILE NO. ANNEX-I 1.EXPORTER‟ S/CONSIGNOR‟ S NAME AND ADDRESS 2.DECLARATION TYPE 3.VALUATION 4. PREVOUS REF METHOD

5.PAGE 1 OF PAGES 6.CUSTOMS OFFICE 7. BANK CODE 8.IGM/EGM REFERENCE & 8a. INDEX DATE 10. IMPORTER‟ S/CONSIGNEE‟ S/PASSENGER‟ S NAME & ADDRESS 9.DRY PORT IGM/EGM REFERENCE & DATE 9a. INDEX 11. DECLARANT (OTHER THAN EXPORTER/IMPORTER)

12(a)TEL: 13.C.H.A.L. NO JOB NO 14.NTN 15.STR NO. / PASSPORT NO. 16.WAREHOUSE LICENCE NO. 17. TRANSACTION TYPE 19.LC / DD NO. AND DATE 20. COUNTRY OF DESTINATION 18.DOCUMENTS ATTACHED E-FORM NO.& DATE INV [ ]B/G BL/AWB/ [ ]IT EXMP 21.CURRENCY NAME & CODE 30. MARKS/CONTAINER NOs. CO [ ]

22.VESSEL/MODE OF 23.BL, AWB, CON- NO. & 24.EXCHANGE RATE

Brochure – Import of Vehicle TRANSPORT DATE

25.PORT OF SHIPMENT 26.PAYMENT TERMS

27.PORT OF DISCHARGE 28. PLACE OF DELIVERY 29.DELIVERY TERMS

31.NUMBER OF PACKAGES 32.TYPE OF PACKAGES 33 (a)GROSS 34.VOLUME M3 WT (KG)

35.GENERAL DESCRIPTION OF GOODS (b) NET WT

0 (KG)

36. IN THE CASE OF DANGEROUS GOODS, INDICATE HAZARD CLASS/DIV; FLASHPOINT (IN C ) 37.ITEM NO. 38. QUANTITY 38(b) No of 39. CO CODE 40.SRO NO. 41. HS CODE

(a) Unit type units

42.ITEM DESCRIPTION OF GOODS 46.LEVY 47.RATE 48. SUM PAYABLE

42(a.) (PKR) 43. UNIT VALUE 44. TOTAL VALUE 45.CUSTOMS VALUES

(PKR)

DECLARED ASSESSED DECLARED ASSESSED DECLARED ASSESSED

37.ITEM NO. 38. QUANTITY 38(b) No of units 39. CO CODE 40.SRO NO. 41. HS CODE 02

(a) Unit type

42.ITEM DESCRIPTION OF GOODS 46.LEVY 47.RATE 48. SUM PAYABLE 42(a.) (PKR)

43. UNIT VALUE 44. TOTAL VALUE 45.CUSTOMS VALUES (PKR)

ASSESSED DECLARED ASSESSED DECLARED ASSESSED DECLARED

49.SRO/TEST REPORT NO & DT 50. FOB VALUE 54. LANDING CHARGES @%

51. FREIGHT 55. OTHER CHARGES

52. CFR VALUE 56. ASSESSED VALUE 53. INSURANCE % 57. TOTAL REBATE CLAIM/ASSMNT U/S 81

58. MACHINE NO. & 59. REVENUE 60.AMOUNT (PKR) 61. A.O‟ S SIG. & DATE RECOVERED STAMP 64. I/We declare that the above particulars are

CODE | LEVY true & correct

62. P.A. SIG. & STAMP

DECLARANT S NAME & DESIGNATION SIG & ‟ DATE

65. C/F/D NO. & DATE

TOTAL: 63. OUT OF CHARGE SIG. & STAMP

66. BANK STAMP

Continued.

GOODS DECLARATION. GD-I

INQUIRY FOR BOND SECTION’S USE ADVICE/AMENDMENT /REJECTION

(WITH GROUNDS) REGISTRATION BY PORT AUTHORITIES

BOOK & PAGE NO DATE REGISTRATION BY CUSTOMS SHED STAFF

WHARFAGE CHARGES ______

A) DATE OF RECEIPT STORAGE CHARGES ______B) TIME OF RECEIPT

GATE PASS ______C) REGN. NO

EXAMINATION REPORT BY CUSTOMS SHED STAFF PHYSICAL EXAMINATION OBJECTIVE VERIFICATION YES NO

DISCREPANCIES A) LOCATION------DECLARATIONS AS PER PACKING LIST SPECIFICATION B) INSPECTED THE WHOLE COMPRISING ------CASES QUANTITY HAS THE VALUE BEEN APPRAISED C) EXAMINED ------% SELECTED CAES BEARING

NOS------ORIGIN IF YES, MENTION THE VALUE______D) CONTAINER NOS PCT HEADING IS SAMPLE FORWARDED TO GROUP/LAB ------

E) MARKS AND NUMBERS WEIGHT (GROSS/NET) ANY ADDITIOANL EXAM REPORT ------DATE OF MFG/EXPIRY------

F) IGM/EGM ------SHEET (ATTACHED) OTHERS INDEX------

Other Facilitation and Tax Education Material Produced by Federal Board of Revenue Computer software Income Tax Assistant Version 1.0 for the tax year 2003 Income Tax Assistant Version 1.1 for the tax year 2004 Income Tax Assistant Version 1.1 for the tax year 2005 For computing chargeable income from salary, property, business, capital gains and other sources, exclusions from income, taxable income, applicable gross income tax, reductions, credits etc. and income tax payable / refundable

For generating related computations, returns, certificates, statements, wealth statement and its reconciliation

Publications Brochure – 001 Universal self-assessment and record keeping Brochure – 002 Business accounts, documents and records Brochure – 003 Taxation of income from salary Brochure – 004 Taxation of income from property Brochure – 005 Collection and deduction of tax at source Brochure – 006 How to fill in income tax forms Brochure – 007 Charities Brochure – 008 Income Tax Appeals Brochure – 009 Taxation of income from dividend Brochure – 010 Depreciation, initial allowance and amortization of capital expenditure Brochure – 011 The mechanism of Alternate Dispute Resolution Brochure – 012 Taxpayer’s Charter Brochure – 013 Import of vehicles Quarterly Review Year Book Under Publication Pakistan Baggage Rules Taxation of capital gains Taxation of income from profit on debt Incomes subject to final taxation Sales Tax guide F A T E “Facilitation And Tax Education “ Is the Key to Voluntary Compliance And Voluntary Compliance Is the Key to “Better Revenues” Grievance

Brochure – Import of Vehicle